DoD awards $31.3M for Gray Eagle aircraft engineering, with no competition

Contract Overview

Contract Amount: $31,284,234 ($31.3M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-02-28

End Date: 2024-07-06

Contract Duration: 494 days

Daily Burn Rate: $63.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES FY19 - 23 FOR GRAY EAGLE AIRCRAFT SYSTEMS JOINT TECHNOLOGY CENTER SYSTEM INTEGRATION LAB (JSIL) AND THE GRAY EAGLE MODELING, NAVIGATION, AND INTEGRATION (GEMNI) SUPPORT FY23

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $31.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: ENGINEERING SERVICES FY19 - 23 FOR GRAY EAGLE AIRCRAFT SYSTEMS JOINT TECHNOLOGY CENTER SYSTEM INTEGRATION LAB (JSIL) AND THE GRAY EAGLE MODELING, NAVIGATION, AND INTEGRATION (GEMNI) SUPPORT FY23 Key points: 1. Significant contract value of $31.3 million for critical aircraft systems. 2. Sole-source award raises concerns about potential overpricing and lack of innovation. 3. High risk associated with single-vendor reliance for essential engineering services. 4. Sector focus on Aircraft Manufacturing, a key area for defense readiness.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to benchmark pricing effectively against similar services. Without competitive bids, there's a risk that the fixed fee may not reflect optimal market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits price discovery and competition, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The absence of competition for essential engineering services may result in inflated costs, directly impacting taxpayer funds allocated to defense.

Public Impact

Taxpayers may be overpaying for engineering services due to the lack of competitive bidding. Reliance on a single contractor for critical aircraft systems poses a national security risk if performance falters. Limited transparency in pricing could hinder effective oversight of defense spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost-plus contract type
Potential for overpricing

Positive Signals

Supports critical defense aircraft systems
Long-term contract duration

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically supporting the Gray Eagle aircraft systems. Spending in this area is crucial for maintaining defense capabilities, but competitive sourcing is vital to ensure cost-effectiveness.

Small Business Impact

The contract was awarded to General Atomics Aeronautical Systems, Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this sole-source award.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is delivering services efficiently and at a fair price. Robust auditing of costs and performance is essential for accountability.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated costs due to lack of price discovery.
Dependency on a single contractor creates risk.
Cost-plus contract type may not be the most cost-effective without competition.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. ENGINEERING SERVICES FY19 - 23 FOR GRAY EAGLE AIRCRAFT SYSTEMS JOINT TECHNOLOGY CENTER SYSTEM INTEGRATION LAB (JSIL) AND THE GRAY EAGLE MODELING, NAVIGATION, AND INTEGRATION (GEMNI) SUPPORT FY23

Who is the contractor on this award?

The obligated recipient is GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $31.3 million.

What is the period of performance?

Start: 2023-02-28. End: 2024-07-06.

What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or urgent needs. However, without specific details, it's crucial for the Department of Defense to rigorously justify this approach and implement strong cost controls and performance monitoring to mitigate risks associated with limited competition and ensure taxpayer value.

What are the potential risks to aircraft system performance and sustainment if General Atomics Aeronautical Systems, Inc. faces financial or operational challenges?

A sole-source award creates a critical dependency on a single contractor. If General Atomics Aeronautical Systems, Inc. encounters significant financial difficulties or operational disruptions, it could severely impact the sustainment and performance of the Gray Eagle aircraft systems. This could lead to mission readiness issues and necessitate costly emergency procurement or transition efforts.

How does the cost-plus-fixed-fee structure compare to alternative contract types in ensuring value for money in this specific engineering service context?

Cost-plus-fixed-fee contracts can incentivize contractors to control costs, as their profit is fixed. However, without competition, the baseline cost is not market-tested. For engineering services, if the scope is well-defined, a firm-fixed-price contract might offer better value. If scope is uncertain, other incentive-based structures could be explored to better align contractor and government interests.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 14200 KIRKHAM WAY, POWAY, CA, 92064

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,284,234

Exercised Options: $31,284,234

Current Obligation: $31,284,234

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $817,934

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ18D0138

IDV Type: IDC

Timeline